Articles in Category: Cash-Out Refinance

October 18, 2024

When Can I Refinance An FHA Loan?

When can I refinance an FHA loan? That is a common question and one that is addressed in the FHA loan handbook, HUD 4000.1. There are rules that govern how and when you can refinance your home loan and those rules will vary depending on the type of refinance loan you seek. Most FHA home loans, including refinance loans and even reverse mortgages, require occupancy as a condition of loan approval. In the case of FHA Cash-Out Refinance loans, occupancy is necessary for at least one year before the new loan. From HUD 4000.1: “Cash-out refinance transactions are only permitted on owner-occupied Principal Residences. The Property securing the cash-out refinance must have been owned and occupied by the Borrower as their Principal Residence for the 12 months prior to the | more...

October 1, 2024

Intro To FHA Refinance Loans

By Bruce Reichstein

The Fed announced a substantial rate cut in 2024. That action has more homeowners thinking about their refinance loan options and how they can take advantage of potentially lower rates to come. Refinancing helps some borrowers save money in interest payments over the long term. It can also, depending on circumstances, help you get into a lower monthly payment. Once rates have fallen to the right levels (for some borrowers) these options get more realistic than they have been in the past two to three years. Refinancing can also result in cash back to the borrower once the original loan has been paid off and the associated closing costs dealt with. Not every refinance loan offers this, but FHA loan programs do include cash-out options. If you need to refinance | more...

August 14, 2024

The Credit Check For FHA Cash-Out Refinances

By Bruce Reichstein

Is the credit check for an FHA cash-out refinance loan the same as for a new purchase home loan? Borrowers want to know how their credit will meet lender standards when applying for a refinance loan. Some make the same common mistakes in the months leading up to a refi loan application that others do when applying for a new purchase home loan. What can you do to increase your chances at refinance loan approval? Treat An FHA Cash-Out Refinance Loan The Same As Your Original Mortgage FHA cash-out refi loans require a new credit check and a new appraisal. The new appraisal ensures you are getting the value of your home that market values currently reflect. When rising property values may increase your potential cash out, the appraisal ensures | more...

July 30, 2024

FHA Refinance Loan Basics For New Borrowers

By Joe Wallace

An FHA refinance replaces your existing mortgage with a new one. It is sometimes used to obtain a loan with more favorable terms or get cash out at closing time but an FHA refi loan can also be done to exit a conventional loan or an adjustable-rate mortgage. Borrowers are commonly motivated to refinance to get a lower interest rate, to shorten their loan term, or tap into their home equity. The FHA offers several refinance programs tailored to different needs. Which one is right for you? FHA Rehabilitation Refinancing The FHA 203(k) rehab refinance loan program enables you to borrow extra funds for home renovations or repairs. This can help if you want to refinance and upgrade your home simultaneously. You can refinance a conventional loan or an existing FHA | more...

Rehab Refinance Loans, reverse mortgages

July 23, 2024

Pros and Cons of Refinancing Versus Reverse Mortgages

By Joe Wallace

As we age, sound financial decisions become increasingly crucial. For many seniors, leveraging home equity is a key consideration, and there are two important options to know in this area. Two FHA loan products can help you access home equity. One has an age requirement (the reverse mortgage) and one does not (refinancing.) Those two options are FHA reverse mortgages and FHA refinancing. Each option has its pros and cons, which is vital for making an informed decision. Reverse mortgages offer seniors a way to boost monthly cash flow. They eliminate required monthly payments, providing significant financial flexibility. Additionally, they offer lump-sum payouts, which can help cover home repairs, medical expenses, or other significant costs. However, reverse mortgages have drawbacks. The most notable is the gradual depletion of home equity. | more...

July 22, 2024

Refinancing A Conventional Loan To FHA

By Joe Wallace

Do you need to refinance out of an adjustable-rate conventional loan? Do you want a potentially lower mortgage rate? Do you need to take equity out of your home in cash? Refinancing from a conventional mortgage to an FHA loan can offer several advantages for borrowers with such financial needs and goals. The advantages include the possibility of qualifying for lower interest rates than some conventional loans and getting a more predictable mortgage when refinancing out of a traditional or FHA ARM into an FHA fixed-rate loan. You can also use an FHA cash-out refi for debt consolidation or tap into your house’s equity. Qualifying For An FHA Refinance Loan To be eligible for an FHA refinance loan, there are requirements similar to some purchase loans: Costs Associated with FHA | more...

June 10, 2024

When You Need To Renovate Your Home

By Joe Wallace

There is more than one way to improve your home in 2024 with an FHA loan. Do you want to cash out the equity you have built in the home and use some of the cash for repairs? In such cases, an FHA cash-out refinance is the right loan. But in other circumstances, a different FHA loan option may be better. How do you choose? FHA Rehab Loan Options The FHA 203(k) rehab loan helps those who want to buy or refinance a fixer-upper home or a house that needs improvements to bring it up to code. The FHA 203(k) rehab option is for any qualified borrower, and there is a disaster relief version known as the 203(h) for those who have homes in federal disaster areas. FHA 203(k) rehab | more...

April 25, 2024

Need To Remodel Your Home?

By Joe Wallace

What kind of FHA loan product is right for your home repair projects? Some people want to fund a remodeling or renovation project using a credit card, but what happens when you compare interest rates on your credit card to the rates you might be charged for an FHA refinance or an FHA 203(k) Rehab loan? Some people put these repair expenses on their credit cards because they are unable to build equity in their homes for a HELOC or a cash-out refinance. But for those who can refinance to pay for the work, the savings could be a major factor in their choices. Remodeling With An FHA Cash-Out Refinance The cash-out refinance option requires sufficient equity—20% or more, depending on the lender—to be approved. But the tradeoff is that | more...

January 2, 2024

FHA Refinance Options For 2024

By Joe Wallace

Many expect home loan rates to start falling in 2024. Some potential FHA loan applicants want to know what kinds of refinance opportunities wait for them as the housing market recovery gets underway, however slowly. We explore some of the options below. FHA Refinance Loan Options You have multiple choices when it comes to FHA single-family home loan refinance options. They include FHA cash-out refinancing, FHA streamlines refinance loans, and no-cash-out FHA refinances loans. You can refinance an existing property with an FHA 203(k) rehab loan that lets you refinance and renovate simultaneously as an alternative option. Streamline Refinance Loan Option In Early 2024 Mortgage loan interest rates are too high at press time to consider using an FHA streamline refinance option. FHA streamline refi loans are for those who | more...

December 15, 2023

FHA Refinance Loans In 2024

By Bruce Reichstein

2023 was a tough year if you needed a refinance loan. Purchase loan interest rates and refinance loan rates saw the 8% range move into clear view in 2023. And that stopped some borrowers in their tracks, not wanting to refinance their home loan at a higher rate. Did it pay to hold off on a refinance in 2023? The short answer in this particular case is yes. Mortgage rates started moving lower in the final weeks of 2023, and financial pundits are hopeful that the new year will bring more recovery in mortgage rates suitable to tempt those interested in refinancing. October 2023 High Water Mark For Mortgage Rates? Rates began recovering from the October highs, recovering back down to numbers in 7% range. There are expectations of further | more...